Inflationary pressures seem to be increasing across China. The bulk in orders which increased the demands also pushed the prices and now inflation can be seen knocking at China’s door.

The China Manufacturing Purchasing Managers Index was at 56.1 in December, which was a substantial rise compared to the figure of 55.7 recorded for November. This indicates growth in the economy. Employment and new orders remained above the expansionary mark. Input and output prices also rose.

After falling for a year, the PMI averaged its highest quarterly reading in survey history in the final three months of 2009.

The analysts feel that industrial overcapacity will restrain price pressures and that the government will rein in money growth to keep a lid on inflation.

More employment has also been undertaken to undo the over-exceeding demands.

“This all suggests that the case for tighter policy, including a stronger currency, is likely to build in coming months", Brian Jackson, an economist with Royal Bank of Canada in Hong Kong said.